You have to realize that a payday loan has to be paid back. There are consequences if you don't.
Payday loans can provide quick emergency cash for people who don't have access to credit cards. But, they come with high interest rates. If you take out a loan for a couple of weeks so that you can fix your radiator and pay the loan back when your next paycheck comes in, you're okay. You will pay a high interest rate for a couple of week's worth of money, but in an emergency situation like this, payday loans can be a godsend.
But, what happens if you don't pay a payday loan? What happens if you just skip out?
The first thing that will happen is that the interest will continue to pile up on your debt. That means that a 0 loan can quickly become a 00 obligation.
If you don't pay up, the lender can go to court and get a Judgment against you. When they do this, they can also collect attorney's and court fees against you. So, that 00 becomes 00.
Then, they can get a lien on your property. They can seize your checking accounts, real estate, or personal property to satisfy the Judgment.
What happens if you don't pay a payday loan? Well, if you took out a loan to fix your radiator, you could end up losing the car entirely if you don't make good on the debt.
Additionally, you should know that in some jurisdictions, you can be arrested for not paying back a payday loan. You could never be arrested for failing to pay off a credit card, so why does defaulting on a payday loan land you in jail?
The simple answer to this is that to secure a payday loan, you wrote a post dated check. In some places, you can be arrested for writing a bad check. It is very important to check the fine print on the contract you sign when securing the loan.
So, are payday loans ever a good idea? If you understand that they are very high interest loans and that they must be repaid on time, they can give you a lifeline in a true emergency. If you don't have any credit, your family and friends are unable to give you a loan, and you need the money in a hurry, these cash advances can save the day.
Just be aware of what happens if you don't pay a payday loan.
What Happens If You Don't Pay a Payday Loan?
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